ALEX BRUMMER: Don't go soft on the bankers

VInce Cable is right to keep his foot on the throat of the bankers. The current year may not produce the outrageous bonuses of 2009, when much of the Western world was fighting recession, but we can be sure that for the narrow class of ' casino' bankers, it will be another year of never having it so good.

It is welcome that John Varley and other High Street banking bosses are seeking to do a deal with chancellor George Osborne on what is being called a 'Big Society Bank'. But for institutions with balance sheets measured in the hundreds of billions, a huge free endowment of money from their retail customers is no more than a drop in the ocean.

What it should not mean is that Britain abandons its commitment to make bonuses more embarrassing. A key element of this was Sir David Walker's original idea that annual reports should contain an account of the numbers of financial workers receiving exceptional pay.

Bankers' pay : We can be sure that for the narrow class of ' casino' bankers, it will be another year of never having it so good, says Alex Brummer

Britain, as Europe's leading banking sector, had a chance to lead the
way on this, as it has on much corporate-governance. So it is a shame
that Walker backed away and that Osborne appears to have accepted this
gift. Rather than wait for international action (we have seen how long
that takes on current account imbalances) the country should act now.

Will it drive away some investment banking teams? Quite possibly.
But one should never forget the commercial advantages that come from
operating out of London, where there is a high degree of stability.
Policy is made in transparent, democratic fashion not by unaccountable
autocracies, as in Singapore and Hong Kong.

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Varley may well be interested in polishing his image for his next
job, with one eye firmly thought to be trained on Threadneedle Street.

But we should not forget that the Barclays chief executive
presided over a culture where it was possible for his successor Bob
Diamond to sell shares in a related company (BGI) and become Britain's
highest-paid banker.

Musical bumps

The debate about the wisdom, or not, of foreign takeovers rages on.

At a seminar at the Civitas think-tank, the engineer and
industrialist Sir Alan Rudge argued coherently that the change in
ownership of an A-Z of British business was a big contributor to the
loss of UK manufacturing and a big hole in the nation's balance of
payments.

Others argued that it did not matter because the city had (until
the last couple of years) done so well.

The two are closely related. The very same open capital markets
that have made the Square Mile such a powerhouse have also exposed
public companies to plunder without any consideration of the broader
public interest.

What was clear, however, is that everyone present felt a great
deal of work needs to be done to see if Rudge's proposition is correct,
and to find solutions.

All that is fine and dandy, except the sand is quickly slipping
through the egg-timer. The speaker, sitting before a list of great
industrial names that have vanished, pointed out the UK now only has
6,000 companies employing more than 250 people.

Another firm has just bitten the dust. New Labour promised to
revive the UK economy around cooler industries, with music in the
forefront. The standard bearer EMI is spending the larger part of its
free cashflow on paying its debt interest bills to citigroup. Now we
learn that Chrysalis, which brought the world Jethro Tull among others,
is to sell itself and its handsome music back catalogue - which
includes David Bowie and Michael Jackson - to German giant Bertelsmann
Media Group.

The buyer is a company with a less than shining record (no pun
intended) as a part owner of UK businesses such as Channel 5, plus some
heavy historical baggage.

So, yet another bit of Britain bites the dust while the Takeover
Panel, the Department of Business and the Commons prevaricate.

Tide comes in

The Ireland bailout has done nothing to calm euro woes. The single
currency has lost 4 per cent in value over the week and with Ireland
still floundering around, the speculators have turned their guns on
Portugal and Spain. The big question for both the Iberian countries is
how to react. Both deny that any rescue is in the offing, but then so
did Athens and Dublin.

Portugal, with national output of less than £150billion, is
probably manageable.

Spain, where bond yields have surged to their highest level since
the launch of the euro, is a different kettle of fish. The warning by
Spain's prime minister Jose Luis Rodriguez Zapatero that speculators
will lose money if they take on Madrid is dangerous.